VOL. 129 | NO. 227 | Thursday, November 20, 2014
Potential Cargill Tenant Puts Rate Hike on Hold
By Bill Dries
As Cargill Inc. prepares to close down its Memphis corn mill by the end of the year, there are talks about moving another tenant into the facility. And about 50 of the 440 workers at the corn mill on Presidents Island will remain in Memphis at a smaller operation.
Cargill Inc. is preparing to close its Memphis corn mill on Presidents Island by the end of the year, but there are talks of a new tenant moving into the facility.
(Daily News File/Andrew J. Breig)
City Council member Myron Lowery talked about the two developments and Memphis Light, Gas and Water Division president Jerry Collins confirmed both Tuesday, Nov. 18, as the council voted down the utility’s proposed 2.3 percent water rate hike.
“I don’t know how those are going to materialize, but those talks are there,” Lowery said. “We don’t know what the future holds. But there will be a footprint of Cargill still in this community, which could still rise again.”
The water rate hike was recommended by the MLGW board specifically because of the closing of the Cargill corn mill. Cargill is the utility’s largest single water customer, and its closure means MLGW will lose $1.8 in revenue, even with the smaller operation remaining in the city.
Most on the council felt hiking water rates before the closing was premature. They thought it could wait until next year when, according to Collins, the utility will probably propose a $1.40 water rate hike separate from Tuesday’s proposed hike. The proposal would have added about 35 cents a month to the average residential water bill.
Collins said the rate hike was to keep the cash flow for the water division at its present level, “which is not a huge amount of money,” he added.
Questioned about the impact of the Cargill closing on electricity and gas rates, Collins told the council those rates have variable costs for the most part, unlike the water division.
“Water is different because we don’t actually buy water from anybody,” he explained. “We just pump it from the ground. There is very little upfront cost. … It is also all fixed cost, and that fixed cost is to maintain the water distribution system and maintain and operate the water treatment plant.”